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  CSPAN    U.S. Senate    News/Business.  

    September 12, 2012
    5:00 - 7:59pm EDT  

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quorum call: oar a.
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ms. klobuchar: mr. president, i ask that the quorum call be vitiated. officer without objection. ms. klobuchar: thank you, mr. president. i'm here to talk about the important veterans job corps act of 2012 that's on the floor of the senate, but i did first want to express my thoughts as so many of my colleagues have done on both sides of the aisle that i strongly condemn the attacks in egypt and libya. i am deeply saddened by the death of our ambassador there as well as several other american citizens, and i join all america -- not only in condemning these attacks but in also sending my prayers and thoughts to the families of those killed by these senseless and horrific acts of violence. on to the veterans jobs corps act, mr. president, because as we all know, as we've seen by
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this who are refuseic violence and by -- by this horrific violence and by what we've seen overseas and in the mideast, our troops face that every single day when they're there, as do our diplomats. they face that kind of threat. and when they come home to this country, we must treat them with great dignity and respect. i've always believed that when we ask our young men and women to fight in defense of our nation, we make a promise that we will give them the resources they need to complete their mission. we also promise to take care of them when they come home to this country. when they signed up to serve, there wasn't waiting line, a understand when the come home to the -- and when they come home to the united states of america, when they need a job or health care or an education, there should never be a waiting line in this country. as a senator from minnesota, fighting for our veterans has been a major fa cuss. we have the fifth biggest national guard in the country, give than our population is only
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22nd in the country, you can so that we have a lot of people who want to serve our country and sign up to serve on the front line. we have worked to cut through the red tape and streamline credentialing to help service members transitions their military skills into good-paying jobs at home. to give just one example, right now returning paramedics are too often unable to count the medical training they receive in the military towards receiving a license to become a sillian emergency medical technician. that's why i introduced the vitiates to paramedics act to fix that problem by encouraging states to give paramedics credit for the medical training that they've already received in the military. not only does this help our veterans, mr. president, it also helps relieve the shortage of american medical personnel, especially in our rural areas where we have seen the shortages. with commonsense solutions like these, we cannot only fulfill
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our commitment to our veterans, but we can also help lift our economy and make sure that people who have the skills fill the jobs that we have available. mr. president, this is what the veterans jobs corps act is all about, fulfilling our promise to our vents, ensuring that -- to our veterans, ensuring them the training and the opportunities they need to find good-paying jobs and strengthening our nation in the froes. to list a few of the important provisions in this bill, first the veterans jobs corps act gives veterans a new opportunity to serve and protect america by granting them prioritized placement in first-responder positions like police, firefighters and emergency medical technicians. second, this bill would create conservation and resource management jobs for veterans, enlisting their help in building a stronger and more beautiful america through the restoration of our forests, parks, coasts, and public lands. third, the veterans jobs corps act would establish a pilot
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program to provide verbs with access -- veterans with access to the internet and computers to assist in job searches, a key bipartisan provision first introduced by my colleagues across the aisle. and, fourth the veterans jobs corps act would especially help rural veterans find employment by granting them greater access to career specialists hock help them -- who can help them write resumes, prepare for interviews and find jobs. this amazing experience and leadership experience they've had overseas fighting for our country does not always translate, the terms and the words and the ways it's on a resume into really explaining what it toss a potential -- what it is to a potential employer. this would also allow eligible veterans and spouses to enroll in the transition assistance program so that they can relocate or return home in
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pursuit of job opportunities. that is could i benefit in my state of minnesota, as i noted, which is very rural and also has no military bases. the fact is that our returning veterans have battle-tested skills that are valuable to employers in all kinds of fields. this is something companies in my state have recognized. in fact, our business communities, small and large, are already leading the way in reaching out to service members before they even begin the process of transitioning home. in april this year when minnesota's 34th infantry division were still deployed in kuwait, representatives actually flew to kuwait to help soldiers spruce up their resumes and them for interviews. now all across minnesota, large and small companies are targeting their recruitment efforts on returning service members. this is the type of initiative that we need. in recent months, the unemployment rate for minnesota
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veterans who have served since 9/11 has hit nearly 23%, almost double the national average for vets of the iraq and afghanistan wars sm. an unemployment rate that high among the men and women who have served our nation is unacceptable especially when our state's unemployment rate is at 5.8%. with initiatives like those launched by private-sector companies in our state and with training programs like those created by this critical legislation, we're going to turn this situation around. that's why i'm calling on all my colleagues today to support the veterans job corps act. this important bill, which is fully paid for, goes a long way in providing our returning veterans the leg they need in transitioning to the civilian workforce. minnesota has always been a state that understands the debt we owe to the men and women who have served and sacrificed for us. i call on all of my colleagues to vote for this bill and to
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take a step towards fulfilling that debt. this is the least we can do for people, for our troops, for our soldiers who have fought to protect our values of freedom, democracy, and human rights. thank you, mr. president. i yield the floor. and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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quorum call:
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mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i would ask that the quorum call be dispensed with. the presiding officer: without objection. mr. sessions: mr. president, the veterans job corps bill properly written could be a positive piece of legislation, and i am not speaking about the intent of the bill, whether it can be done effectively, but i, as ranking republican on the budget committee, have to point out that this bill violates the budget, violates the principles of common sense and good management, and it's typical of the reason this government is on an unsustainable financial path. it's typical of why we are going broke.
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this bill will cost a billion dollars over five years. spending on a new program claims to be offset by new taxes and new revenue sources, and -- but my staff has worked on it and has confirmed that there is a 302-f budget act point of order against this veterans jobs corps act and the manager's amendment, and i'm confident that if and when it's raised, that the -- that the parliamentarian will agree. there is a budget point of order against it because it would increase budget authority for the veterans affairs committee's allocation above what was agreed to in the budget control act. there was a limit to how much we would spend on the veterans department, the veterans committee, as to how much they had. they had a limit in the number of dollars that they got. it was part of the august
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agreement, budget control act a little over a year ago, a year ago august. and this is a serious thing. we told the american people we would raise the debt ceiling by about $2.1 trillion, but we were going to cut spending -- immediately raise the debt ceiling and allow $2.1 trillion in more spending, but we promised that we would reduce spending over the next ten years by that same amount. and that was the agreement, the president signed it, our democratic colleagues supported it and it passed, and the debt ceiling was raised so government continues to go forward when we were borrowing 40% of every dollar we spent in the united states government, borrowing 40 cents of every dollar spent, and if that had not -- if we hadn't raised the amount of money that we could borrow in this country, the entire government expenditure would be reduced
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immediately by 40%. that's how big a hole we are in. and so what this new bill with good purpose does, it spends a billion dollars more than we agreed to spend. so what occurs, what occurs is if a person objects to that and raises a budget point of order, the senate has to waive it, openly, publicly, before the world have to say we can't find money within our budget to spend one more billion dollars. we can't find that. we're just going to spend it anyway, every penny of it has either got to be borrowed or would be paid for by increased revenue somewhere.
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and so we're going to vote on that, i believe. i intend to offer that amendment. but it's even worse than that. they say well, over ten years, we promise to raise enough money to pay for this. that over the ten-year period, we'll raise a billion dollars, don't worry about it, these tax increases and revenue enhancements will pay for it, and count on us. but it's not so. i hate to say it. we have in this bill one-third at least of the amount of money that would be spent by the job corps bill. one-third of that comes from a well-known gimmick, a manipulation of the accounting system around here that allows us to spend more money that we have, and it scores not as an
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expenditure. it scores as being properly a valid pay-for, and it's as bogus as a $3 bill. i'd say without danger of contradiction that this is a gimmick that if a private company were to do it and utilize it and to manipulate and mislead stockholders, they would have a lawsuit against the offices of the corporation. they would. it's totally bogus. let me explain to you how it's done. this has been done before. i've offered a bill called the honest budget act. senator olympia snowe joined me in that. it would eliminate a number of misleading gimmicks and fraudulent activities, and this is one of them. so all right.
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certain corporate tax revenue that we get from corporations and the drafters of this bill cleverly got the idea that they could just accelerate the amount of money up from fiscal year 14 into fiscal year 13. they bring that money back into 13 and collect it a little earlier and say we have got another $135 million in revenue in 2013. and so we can spend it, and it doesn't cost anything because we have got this new money and it's paid for, this new veterans jobs corps bill will be partially paid for, about one-third of its total cost will be paid for by collecting corporate revenue taxes sooner.
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but think about that. if you pay your tax cooner, if you pay your tax a few months earlier and you pay it in 2013 fiscal year, well, you don't owe it in 2014, do you? you were planning on paying it in 2014. and now you don't have to pay it in 2014. so the hole has moved from 2014 into 2013. you have moved the money over here but you don't have the revenue the next year that you would normally have had, and do you that over five years, and oddly it comes up every odd year. the fifth year -- and this is where our colleagues wanted the number to fall, in the fifth year, it shows as if we had a
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$392 million total increase in revenue, the money added up each year over five years increases those $392 million. isn't that great. we didn't raise taxes. all we did is cause the money to come in a little earlier and we have netted $392 million. right? wrong. year six is where the revenue does come in. in year six, it shows that you will bring into the u.s. treasury $392 million less because that money was collected early in the previous year, $392 million less in year six. it never is a net increase to the u.s. treasury, although it might appear to, according to the conventions of accounting, that the c.b.o. uses around here. and c.b.o. knows this is true. they would tell you if you would
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ask about this. they know exactly what this system is, but they follow their rules, and in the fifth year, they suggest we have a $392 million surplus from this advance collection of corporate taxes, and it's not so. so my colleagues, this is a problem for us. we do not need to continue down this pathway. we need to be honest with the american people. the president of the united states should be objecting to this kind of stuff. he should say no, you can't play that game. the majority leader, senator reid, should be saying no, that's a manipulation, the budget chairman, senator conrad, ought to say no, it violates the budget act. this isn't the way to do it. senator burr's alternative piece of legislation that would do much the same thing is an honest
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piece of legislation. it does not violate the budget act and it is not subject to a budget point of order. and this legislation could have been crafted that way, too. but being as, i guess, greedy as we are, rather than having to face up to a little bit of a difficulty of finding a few hundred million dollars, a couple of hundred million dollars out of 3,700,000,000,000 we'll spend next year, rather than trying to find 200 million out of 307 billion that we will spend, we would rather manipulate it this way. i've got to say, what did we mean in august a year ago when we said we were weather bug go cut spending by $2.1 trillion over ten years? was that just a joke?
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is this the kind of thing we're going to do every time a bill comes along and it's got some appeal to it and we'd like to support it? are we not willing to stand up and pay for the legislation? is there no waste, fraud, and abuse in this government we couldn't really work on? there certainly is. this government is mismanaged, it's out of control, a chief executive spends every day getting on an airplane going somewhere to make a speech. what we need is somebody in the shop managing the taxpayers' money. and when congress tries to play these gimmicks, we need a president that says no. that's what this country needs. until we get it, we're never going to bring our spending under control. and what does my president say and my democratic colleagues in
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the senate say? send more money. we can't cut anything. we've got no ability to find savings. we just need more money, american people. send more to washington, private sector. doesn't make a whole lot of difference in an economic sense, exactly where it comes from, it's all a further drain out of the private sector so the public sector can spread the money around, maybe solicit some votes in the process. so this is how we got into this fix. i'm concerned about it. i think we should not go forward with legislation as drafted. perhaps some compromise can be reached. senator burr has worked hard on it, maybe the democratic colleagues can get together and put up a veterans jobs bill that's honestly paid for. i know they could. and if it's worth it and we can find ways to make choices that we're paid to do, the tough
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choices and priorities and help veterans find jobs through some sort of mechanism like this, then let's do it. but let's pay for it. and let's don't as use -- don't use these gimmicks, let's don't go at it in a way that misleads the american people about how much the legislation is truly costing. i feel strongly about it. i'm getting frustrated about it. it's always, well, it's just, you know, a few hundred million here and a few hundred million there and the bill needs to pass and don't raise these problems now, you're slowing down the machine, we got a lot of things to do, doesn't look like we're so busy right now, but people think we've got things to do. and they don't want to have to wrestle with the minutia of a few hundred million dollars a year. but we should do that and if we do that every day and if we stay within the budget amount that we agreed to last august, we will
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have made some improvement in the overall debt course of america. and just to make clear, that the budget control act agreement called for a reduction of $2.1 trillion in spending over ten years. during that time, we were projected to spend $47 trillion. so the net reduction would be from $47 trillion to $45 trillion. surely the republic is not going to sink into the ocean if we reduce our spending from $47 trillion to $45 trillion. surely we can find that. it's not enough. we need to do about three times that much at a minimum. and we can do that, too. and it's still a substantial increase in spending. this is not a cut in spending over ten years. at the current rate of spending we'd spend about $37 trillion.
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so we're going from 47 -- $45 trillion over ten instead of $37 trillion over ten. still a major increase in spending over ten years. but we're told that's impossible. all we can possibly do is a $2.1 trillion in reduction. i know the. was -- the president was claiming credit for reaching this agreement but the budget he submitted this year wiped out the entire $2.1 trillion. it wiped out the entire -- well, the entire sequester and raised taxes by $1.6 trillion. $1.1 trillion, increased spending -- actually $1.5 trillion in increased spending and about $1.8 trillion in increased taxes. no cuts at all under his budget.
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actually a spending increase over the trajectory we were already on, which is an unsustainable trajectory. i know i'm being frank about this. some can say this is a political argument. well, we're in a political season. and i believe what i've said is accurate. i believe what i've said is true. i believe we are entitled to a budget point of order lies against this bill because it spends more than the veterans affairs is allocated to spend and we need to vote on that. and it's this kind of breaking the budget and spending more than we agreed that's helped put us in this fix. we need somebody to help bring order out of chaos. we're on an unsustainable path. this nation is on the wrong track. we're on a track to decline and debt and financial crisis, not
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the road to prosperity. we cannot continue in this path. erskine bowles and senator ches simpson before the budget committee told us that we have never faced in this country a more predictable debt crisis. that was a joint statement. never faced a more predictable financial crisis was the exact quote that they said. and what they told us was we were on an unsustainable path, if we stay on this path we will have some sort of debt crisis, another 2008, 2007, recession caused by a financial bubble, and the united states government, what a disaster that would be if as we're struggling to get people back to work, get the economy on the rise, we have a financial crisis again putting us back into recession.
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we need to avoid that. we've got to be mature and honest about our money, get our debt under control. this bill violates the budget, it violates sound principles of financial policy, it contains a major, major gimmick, really a bogus allocation of over $300 million that claims to exist that does not exist at all. so we need to fix that. mr. chairman -- mr. president, i appreciate the opportunity to share these remarks. i see no further colleagues. i'll note the absence of a quorum. the presiding officer: the clerk will then call the roll. quorum call:
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the presiding officer: the senator from colorado. mr. bennet: thank you, mr. president. i ask the quorum call be vitiated. the presiding officer: without objection. mr. bennet: thank you, mr. president. i ask unanimous consent the senate stand in recess subject to the call of the chair. the presiding officer: if there is no objection, it is so ordered. recess:
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>> did you see the jobs report described by the way? 95,000 net new jobs created at almost 40000 teeple dropped out of the workforce altogether. it simply unimaginable. >> today we learned after using a hundred thousand jobs when i took office, business once again added jobs for the 30th month in a row, a total of more than 4.6 million jobs.
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>> i've been astounded, you know, for a piece of history that we know so much about my columbus kept numeral journalists, took trips to the americas and then starting with the second trip there were lots of official scribes and army officials at all kinds of people doing lots of writing. missionaries, we know what happened.
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because the people had their hands chopped off. but in 30 years 2 million inhabitants of a spaniel have been killed. and this is part of human nature. no human being wants to be judged by their darkest days. no nation wants to be judged by their darkest day. we have to acknowledge that.
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>> despite a drop in the unemployment rate in more than 95,000 jobs added last month, lawrence katz, labor department economist or the clinton administration is the labor market remains weak but the effects of the financial crisis and recession still lingering. mr. kass was the number of economists who participated last week in an american enterprise institute conference. focusing on federal job training programs. >> for the third and final session of this conference, we've got three distinguished expert. but be very briefly introduce them. paul decker is president and ceo of mathematical research and nationally recognized expert he is in the design, implementation and execution and evaluation of education were worse development programs. as one of the nation's leading experts on employment and training programs targeting displaced -- dislocated workers
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and other unemployed individuals. he's also the president-elect of the association for public policy and management. betsey stevenson, by the way, pose to my far right. betsey stevenson sitting in the middle is an associate professor of public policy at the gerald r. ford policy at the university of michigan. among her, many pastoral she served as the chief economist of the u.s. department of labor from 2010 to 2011. she as you might've guessed a labor economist. she's published widely in leading economic journals about the impact of public policy from the labor market with a focus on women and families in the body of subjective well-being for policy analysis. some of you may also know her from her many media appearances among other things. she's a columnist for bloomberg news.
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can toske to my right is the associate dean of the captains will -- college of business at the william bestir chill professor of economics at university of kentucky. he's also a research fellow at the institute for the study of labor in germany. his primary research areas are labor and human resources, economics and its most recent work is focused on evaluating various aspects of the work first development system in the united states. the role of human capital and promoting economic growth in the region and the impact of tax incentives on the creation of jobs in a region. so without further ado, let me turn it over to paul. >> thank you, stephen. in preparing for these introductory remarks, i wanted to conduct a scan of the research literature and get a sense of the teams they can identify that can provide us with framework.
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interestingly went to the same exercise larry did in the preparation for his presentation. the nice thing is that largely came up with the same rankings. so my comments -- what i'll do is to my comments around the edges rather than repeat what larry said already. as i said, i came up with three approaches i thought were worth highlighting based on literature and the three we largely touched on already, the emphasis on sector training, but more generally getting employers more engaged in the training enterprise as a potential key to success. programs that are intensive, comprehensive or customized at providing training or support in the evidence that we see that can translate into longer-term impacts and finally, reemployment assistance and success of those services and providing short-term impact on participants. with respect to such are focused and greater employer engagement,
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larry describe the concept here. the employers more directly engaged in the training enterprise and thereby lower the risk for everybody. the employers are making clear what their needs are, making clear the training will translate into a job, the participants don't have to forecast what the labor demand is. they have it right in front of them with employers telling what the jobs they move into our. positive evidence cuts across different populations, different programs that means. it includes workers, et cetera. the market is already evolving in this direction and a lot of the programs are talked about. but it's happening slowly. we still need more evidence about how these programs translate into effect is -- of the evidence translates into effective programs at the street level. but it's also the scalability issue that hairier dimension,
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which is in order for these programs to be successful, is likely to be the pc build strong relationships. you don't want them playing until things get tough. you have to do that employer by employer and that takes time. a final comment is you can imagine you bring the employers and potential employees closer together as part of this process. you can imagine the public-sector role above in overtime and maybe may be becoming smaller over time. the public agencies couldn't begin to remove themselves in the process and maybe just for the role of providing direct incentives as well as other individuals. the second area is training and support its intensive comprehensive or customized. when i look at programs that have long-term impacts, we tend to find their programs have one or more of these characteristics. it doesn't work the other direction, so we have intensive programs that aren't effect to,
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but will refine the program they tend to be the intensive ones. again, the evidence cuts across different program settings. going under the bottom of the flight, you've heard folks are to mention the i.t. experiment here. i want to spend a little time on that. the i.t. experiment was an attempt to customize different approaches to providing different individual training accounts for the training vouchers. and essentially this is a random assignment experiment where individuals as they enter the program were randomly assigned and seeking a training count randomly assigned to one approach or another. during the course of the experiment in order to administer their way to the program. essentially the two treatments that want to focus on our one recall guided choice in the other called structure choice. the guide of choice is essentially the status quo and
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there's a variety of characteristics of that, but one of the critical characteristics as the local sites tend to fix the amount available to participate in and they fix it if you have limited level in the course of this experiment about $3000 per participant. in contrast are testing again structure choice. part of our intention was to provide individual participants with more attentive, more prescriptive counseling, trying to explicitly steer them to trading opportunities and promise a good return on investment. the second aspect of that was to take their capital way. so if there was a high return, training opportunity to promised high return, the agency could go ahead and provide an individual training accounts that would fund the training. i say this is critical because it turned out this is the primary difference between these two treatments of this differs a
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little from the way larry was talking about this experiment has it really was the resources that were available at year that ended up being the difference as opposed to the style or the amount of the counseling. so what happened in that comparison? ccu outcomes and the average quarterly earnings measured over long period. seven plus years after random assignment. you can see the group assigned to structure choice had higher earnings than those assigned to traditional guided choice. they're not only sizable earnings differences here, $400 over the entire seven-year. , but they tend to persist so those earnings differences are even higher in the last two years, to follow. more than $500 per participant. if you think those estimates aren't all that great on the
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order of $500 per quarter, it's important to know the cost and relative term structure choice is highly cost to and the reason is they were spending about $1200 per participate more than has been spent under guided choice, but they were generating those earnings over a long period. if you do a benefit cost calculation you find the $1200 investment generates net anaphase of nearly $50,000 per participant. so the big return here for fairly minor tweet in the way the individual accounts are administered. the important question is how did this come about? we dug into that looking at the training. those folks assigned to structure choice approach, largely received the same rate as those assigned to guided choice in the same general occupations, but were more likely to choose a private provider, less light reaches community college as their provider and more likely to finish training, earning a degree in an agile directly
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related to training. so this is a very apparent success story. despite that, it is worth noting that even though the act switches to structure choice and despite the appeal of these findings come at the site so far have rejected structure choice. so as an example, all the sites that participate in the experiment reverted back to the guided choice and it's not as if we'd had a groundswell of local area asking about these findings in contemplating a change in the way in which they go about administering ita's. so this gets to the implementation issue and the challenge we face there. the third in the area has to do with reemployment assistance. we have a talk much about job assistance but it's worth emphasizing temptingly fully tested. a job assistance is effective in generating short-term impacts and earnings. they don't persist over time,
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but that is okay because they're relatively inexpensive interventions that they tend to be cost effective based on those earnings impacts despite the lack of persistence. it also works for broad population. it is for displaced workers, works for disadvantaged workers in a lot of cases. one thing about these services, job search assistance can be relatively broad and includes programs that also provide counseling. they work on the psychology that larry was talking about in his presentation. it helps be realistic about what kind of wish they would be reemploy back so that they don't run around with unreasonable reservation wage expectations. also counseled them to get the search started as quickly as possible. there's a lot of motivation and encouragement of these interventions. final area i want to talk about is which supplements.
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this relates directly to the wage insurance that larry talked about in his presentation and i agree this is an area that has been understood in the u.s., hasn't been rigorously tested in the u.s., has a number of positives going for it, including it is appropriate for older, longer tenured workers that might not be appropriate for training and also displaced workers pretend to find a lot of things that don't work for that population so it's worth considering new strategies. there is a great supplement aspect of the assistance program, but again getting back to the implementation issues that wage supplement has been rarely used, perhaps the program is too complicated or made an accessible in ways that keep people out of the. again, getting back to the issue to figure out whether the barriers to implementation here. so in conclusion for my opening
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remarks, we seem promising approaches to have another successful models that exist out there that can help us frame again about reform. we need to continuously test these promising approaches. a lot of them while they show have not been rigorously tested. we need to rely not only on studies by the department of later that leverage the research out there coming to research and evaluation clearinghouse for the department of labor at the department of education should appeal to help us do that by applying standards to the research and how we can interpret the research out there. we need to address the barriers to the implementation in scale we face and bring them in a applied sense. and just agreeing with comments when interpret the performance if we had better match tricks that would create incentives for
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local areas to experiment on their own and know more about the success and adapt according to those results. thank you. >> tanks, betsy. >> tanks, betsy. >> tanks, betsy. >> to subpoenaed these speakers for talk about details of training programs in the evaluations that have down. i want to take a different tact in my comment. it turns out building off of what polishes talking about to talk a little bit about practical considerations in some of the barriers to implementation. i'll address three issues. the gap between training -- the gap between evaluations, the connection between unemployment insurance system, employment services was the lack thereof and new news coming out of the great recession.
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when a lot of our conversations about training all the way i thought about it as a grad student and an economist before i went to work and administration, which was pretty simple. you evaluate a training program at the workers to get the training are better off than workers who didn't get to training, then it's a good program. if they're not better off in terms of taking -- doing a cost-benefit analysis. but the programs the reality is that much of our complicated and a lot of that is due to the fact that there's a lot of stakeholders there is more training. and one thing to just start picking on the politicians because they are usually the easiest group to start picking on, the politicians are typically fighting over how much to spend on job training.
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it provides greater benefits and costs. and as a result what we often end up seeing his evaluations of training programs take is as a political weapon rather than political ammunition rather than guidance for how to improve job training. the csm politicians worrying that the evaluation will end up getting their program, end up getting their program, their beloved program killed and also shrink the total pie available for training funds and coming back to something said earlier, people are concerned that if the data was a private come at the evaluation was more complicated is not straightforward, that such evaluation could be used inappropriately, where technocrat might take a deeper look inside how could this program be improved or should it
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be scrapped? how should we collect better data to get a better understanding of it. the concern is that, you know, it will come under the line of political fire in her be better to do nothing at all rather than to have poorly gathered information. and not only do studies become politicized, but often they are very designed and set answering the question. such is how much it cost the government rather than whether the program has real benefit that exceed the total cost. so i'll just pick on one of valuation that i read right before i actually love the department of labor. and it was a risk evaluation and eligibility assessed at programs. these incorporate jobs as search assistance and i very much as seeing much of the evidence
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suggesting the job search assistance can be very helpful in getting people back to work faster and i'm very much in support of these programs. with the evaluation did is what to see whether or not the money spent reduce the amount an unemployment insurance by a greater or lesser extent. not reduce the amount. they definitely pay for themselves. they get called to be assistance and if you don't show up you don't venture unemployment insurance. but we couldn't tell from this evaluation was whether we were simply select and some people out, which is perhaps a less desirable way to cut bending because you're simply randomly making a barrier for some people that makes them not show up. but there was successfully reducing god or payment errors, which would be a good thing i
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think her weather was actually helping people get jobs. the distinctions between these mechanisms for cost reduction are crucial to truly evaluate the policy. but they're absent in the evaluation. and i think that this again reflects the fact that some of these valuations are designed to answer the question, the political question rather than perhaps evaluating the question just answered and this goes back to apollo same. these are state agencies and even the grantees. i will share another conversation that i had. i will not share your business, but one of the things i wanted to do was to encourage more training to be provided to the long-term unemployed and i was told no grantee wants to provide services to those people because they will make their numbers
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look so bad. the fact that we have a system where people are trying to cherry pick the easiest to place workers were trying to find the workers who the data does inaccurately identified them as difficult to place is a problem with the way we collect data. so you know, just outside, get tuesday's participation. again, i think this is -- some of this comes out of concern that they'll simply look bad to data collected is not really adequate to do great in-depth evaluation comes back to this concern. we might be better off doing nothing at all rather than ending up with some thing that could be used against us in a way that would hurt our particular state. i think a solution to this in
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one idea would be streamlining service delivery a lot more than they currently do and not tying total funding to the success of an individual training program if instead we had a pot of money for training and then we had people like paul who decided which training programs should be expanded and shall and i was not having any impact on the total amount that was being spent. i think we could end up with better programs that were more efficient and didn't confuse these two particular issues. and finally, one thing that just hasn't come up at all and i actually never hear this discussion, so i think i have to bring this up in terms of another important stakeholders job-training interacts with other programs. so it is a mistake to overlook the fact that when people don't -- we don't have an
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adequate pathway to get people into jobs, our disability insurance rolls swell and so do other social safety programs. but we do cost-benefit analysis and we pretend there's not other other avenues to governments report for people who don't get into jobs, we are ignoring a very important aspect of our government system and an important cosby could be avoiding and certainly in all the discussion of expanding unemployment insurance, i found a very remiss that we did not have discussion about whether that was keeping people up to apply for disability when we are giving them longer to find jobs while being supported by temporary program like unemployment insurance instead of pushing them into a program that people almost never these, which is disability. so let me turn to talking a little bit about the idea of unemployment insurance, employment services and training
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him i think they should be linked together. most recipients are required to receive employment assistance and perhaps more problematically funding for services isn't tied to ui payouts. despite the fact he spent so much money on unemployment insurance, we actually have funding for planet services per person that hit an all-time low recently and may even still be there. it has fallen in real terms by over 50% since the 80s. so when i hear, let's apply private sector principles to running our government programs, i think we mistakenly taken that to me and let's have everyone of our state agencies operating independently, calling themselves different name so no one knows how to find employment services from one state to the next and employers can't coordinate across ohio and iowa. instead it should make him the what would a private sector
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company running on unemployment insurance system do? what they would do is spend dollars that got people off of unemployment insurance if you save more money than it costs. we should think about whether job search assistance should get people back to work faster in the way good for the worker and good for unemployment insurance system. we need to tie those things together. the problem with the reemployment eligibility assessment is there is very little connection between the ui office that is in most states operating those and actually the employment services folks who would actually be able to connect these people with the types of psychological counseling for the types of training program that might help them get back to work. not everyone needs all three parts of our employment support system, but to divorce than this too is important in this very connection. we should be thinking about trying to find ways to tie the systems together in a way that's easy to move across state. now the reason i really wanted
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to come to ui and some of this has recently passed. some of it hasn't and that i think was able to be done because of the fact we were outside of the state-based ui system and in a federal extension of unemployment insurance. so messing with the state system is difficult because the state despite the argument that the federal government funds the administration, the states have most of the control. the federal government doesn't have the data. it's not like they're sitting and not giving it away out of respect for the states. they are not collecting from the states. there's very little the federal government does that his hamstring in what goes on at the state level and state unemployment insurance benefits are paid simply for a matter of being unemployed through no fault of your own and meeting the requirements of been actively looking for work and available for work.
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but you have a lot more flexibility with the federal program because it's not -- at about this is the right one to say, but it's not an entitlement are paid into the same at the state program is. some of the ideas that were floated about by something that ended up being called the president's jobs bill, whatever that was called, american jobs something -- american jobs that. it was called bridge to work, which was really modeled after a program that people on all sides of the aisle have supported them or which allows workers the opportunity to keep their skills and train in the workplace for new occupation while continuing to receive unemployment insurance. you know, what this really amounts to is letting employers try out workers that they're skeptical of. there's a lot of reasons why people don't want to make the receipt of unemployment insurance conditional on something like that, but simply
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trying it out, letting it be evaluated, figuring out of the works. that's something we don't have the answer to even though implemented in georgia and we've never seen a real valuation of that program. they are as -- the other programs that were proposed as wage insurance, which larry astarte todd about to create a path to rehire an increase in unemployment insurance to cover firms to reduce hours instead of workers and to cover people who want to pursue self-employment entrepreneurship as well and support for additional innovative state programs. so i think would be great to have greater coordination across the state, the same time useful to try experimental programs. in fact, that's what will give us a valuation and i think we need to do more of that. in fact, that is some pain that
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has -- there is a small amount of money provided in the bill in 2012. so i have exceeded my time, so i will stop here. but let me make one last comment on what i think is different in our new system because it hasn't been said in our current unemployment climate, which is there's a lot of people who need help adding back into the labor market that are highly skilled and our system does not have any space to support them and losing them is bad for the economy. it's bad for them, just overall bad and we have to find a way to have the system is going to help those folks as well. >> tanks, betsy. jan. >> one of the advantages of going last to take it to build on whatever when i said already. i guess they don't need to repeat it. i'll highlight a few of the things i had in my notes that i
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want to reemphasize. one of the things important to recognize is that we led off with, some of the things larry said this morning is where the point right now where we have an enormous supply of long-term unemployed workers, workers to have seen a significant degradation in their skills, given they've been none of the labor market for so long and we've seen a big increase in productivity of workers who remained in the labor market. i think the large supply of long-term unemployed workers is going to be one of the great and long lasting legacies about the recent financial crisis and subsequent recession. one will deal with for years to come. it's imperative to figure out how to provide them with the skills necessary to get them back in the labor market. in addition, we hear others they call a reticular leg in the house of representatives that week he simply just kill all of our job training programs
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because they are particularly effective. given the supply of long-term workers in this call to tell the job programs is something i certainly don't agree with. i find it surprising we've had so so little public debate about what we need to do with the system to see if we can get it and become more effect is. i want to focus on a couple things today in my comments, one of which is a structural or the lack of coherent structure in our federal job training programs. i'm going to focus on the federal job training programs. again, the lack of progressive valuations of those programs and i would also say the lab from a part tichenor standpoint is useful a valuation. many of the evaluations are focused on estimated the average impact on the treatment of the treated and which is appropriate for measuring cost benefit analysis, but not necessarily that appropriate for telling
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okay, we know it's not working. but parts are working and how do we improve it? i think for both historical and turf reasons, training programs currently operate through a variety of independent and state agencies. it is important to recognize the employment security programs in unemployment insurance program is called wagner peyser and was part of the great depression. the management of this program is divided equally between the states and federal government who were at the time constitutional reasons. at that point they didn't realize the commerce clause was not very relevant. they still worried about that and that's why the program was designed that way. one of the reasons it's so difficult to get states to cooperate with the federal government. as has been outfitted to come up there with the gao in fiscal year 2009, nine different agencies spent $18 billion to administer 47 different training
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programs. the report points out almost all federal employment training programs have included those with broader missions such as multipurpose autocrats overlapped with at least one program that provided similar services to similar populations. so there simply a lot of services being provided and oftentimes not provided in a very coherent fashion, at least from my standpoint. i should make clear there's a lot of people in this room that have worked actively at the department of labor. i am not one of them, so i defer to them. they have a lot more information about the structure of these programs. betsy made some very important points. but from the standpoint of looking outcome it does not seem as if we have a very coherent program. for example, the employment security and trade adjustment act were taa all provide assistance to unemployed workers. in addition both we and taa provide more extensive long-term training programs.
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and often where worker with the training program is more of an accident. who they talk to first, who has money left in their pocket as opposed to comprehensive assessment of where they could receive the most benefit given the situation that they are in. we are in some sense says to fix these by what is creating one-stop centers for unemployed workers can go and referred to the appropriate agency hopes. the structure of these one steps are still very sidenote. there's no single agent in charge of the ones stop in many states. and so the agencies and the one-stop have very different missions. for example, the folks are concerned about getting people on unemployment for administering the component and not all that focused on providing job search assistance to workers who may receive training and other programs. so there is this disconnect and it's difficult for workers to
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flow in between providing these different services. some states are notably better than others. the gao report points to texas and florida. in texas and florida are the directors put in charge of the one-stop swallow employees including es workers and everybody answers and not surprisingly a coherent management structure. they operate more efficiently. the basic problem is that he spend money on administration come you're not spending a lot of money on training and that's a problem. as has been pointed out previously, it's important to recognize most long-term training goes on community colleges both for-profit and public and a month the director of the local web and head of the community college are fairly enlightened, they operate very much separately in a vacuum. and that's the problem. because often the trinity college is a disconnect between
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the community college and job training agencies about what skills they think workers who need and often a disconnect between the community college and local employers. we need to bring everybody into a conversation and we need to structure the system in a way that would allow that. i'm not blaming anyone. i want to make clear i don't live anyone for the way the system has evolved. there's a lot of historical reasons, but it's imperative that we make redesigning the system 80 guys moving forward so that we can fix some of these problems. i'm not saying it's easy because it's going to involve cooperation between states, federal government and congress. but i think one possible solution would be, let's take all the training dollars currently allocated. and i mean all of them. we taa, yes, adult education and literacy, the ged program, job corps, possibly the training that goes under tnf.
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the spring them altogether in a single entity. one thing we can do is simply provide block grants to the states that takes advantage of some of the flexibility across state to be creative and job programs. or even better, let's get the states out of the way and give it directly to the web. the federal government oversight, at the same time, requiring whomever is getting these dollars to conduct ongoing rigorous evaluation in a manner that is appropriate. i think we've heard a little bit about the efforts going on to determine what our appropriate evaluation methods. but let's continue those, pushed out onto the stage, pushed the dollar stomp and ensure that those dollars are spent in a way that continue to be affect it. alternatively, you want to keep it at the federal level. i'm a little less fond of that
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idea, but that's fine. let's combine training programs of their seamless and we can move through them and someone is actually answerable to the results of the training programs. let me talk a little bit about evaluation and the lack thereof. as has been mentioned previously commissars entered the olympic race integration has been completed to date was the one i worked on the caravan and peter. we got 12 states to agree. we asked 50. but i to participate. i can give you their names, medicare released the results on a state-by-state basis. i can tell you what 12 agreed. probably the 12 that agreed with the most competent in handling their data, but i don't know that for certain. there's only one rigorous evaluation of taa that i know of back in 1995. mathematica is is an ongoing one but it's been 12 years since i've looked at it.
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so there has been some were not doing a great other basis. we've heard about the ongoing and their mental evaluation and i think they're important, but it's important to recognize to come in their very extensive. it takes a long time to complete them and they do an outstanding question of answering the questions are trying to address some of that it's often hard to push them harder and ancillary and supplemental questions. i think the research suggests that nonexperimental rigorous evaluations when done appropriately can also provide an supplement the experimental evaluations and actually answer questions that have been raised in the last experimental valuation, which would then feed into the next experimental evaluation and they should work in complement with each other. i would say much of the evaluation done so far doesn't
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often answer a question that would be useful for a practitioner. for example, i can tell you for dislocated workers it seems as if the training doesn't provide advantages that exceed -- that are beneficial, we don't see wage increases or employment outcomes that are enormous for dislocated workers. what i can tell you is why. i can't tell you whether it differs among characteristics and i care about. we see bigger benefits for longer and more intensive training? i don't know. we see bigger benefits based on his providing the training? to benefits differ between for-profit vocational colleges and public community colleges? i don't know the answer to that either. presumably those are interesting things we should know about. as jeff pointed out, the data don't support it, that's not surprising because no one seems particularly interested at least at the federal level on the programs at answering those questions. so maybe if we start telling
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them they said the questions we need to answer, they may fill the data out appropriately so perhaps we can get a more accurate idea. i don't think we know much about the distribution of fat. that's important. what is the impact of the last person in the door. the first person out of the door for cut the program. again, no idea what in effect tells us what happened to the killer the program but that's nonsense out what we thinking about doing. we're expanding or contracting the program. we've talked about what is known as general equilibrium effects or which is shifting chairs around. there has been a little bit of work on that. some of the time frames come a little little done in canada. not much of it done here. one but if we would like to know that i know how the general equilibrium effects across the business cycle. as an example, i have, i have some work that the tech community colleges and return to certificate, diplomas and degrees that the committee college-level and i find they are very positive. there has been a study by
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jacobsen sullivan a number of years ago looking at dislocated workers and the benefit they receive from going to community colleges. there has never been a study looking at federally funded workers to attend community college and what benefits they get from them. one would think that would be an important question to ask. i would argue one of the things that i've seen is that some of the workforce investment are actually hiring consultants to try and justify their existence because of the performance measures their usage so they measure the return on investment for the economic impact of providing job training in an area, basically how much additional employment to the benefit by paying tax and spending taxpayer dollars to hire people. the studies i've seen provide almost no information useful in evaluating a causal effect of the program, nor do they provide inaccurate investment on return of investment for any economic impact.
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so i guess suggestions to be is going to be more modest than suggests that they spend somewhere between 1.5 and 1% of their overall budget and evaluation. right now the data steve provided us suggest it's one 10th of 1%. program should conduct periodic evaluations of the average troop and effects, but also should examine other important measures of program effectiveness. they should require researchers and practitioners to work together to come up with useful for valuations that would help attract two shooters in designing programs. and steve is asking me to wrap up. some of the offers i think we have seen, including deer wells suffered to implement a web work clearinghouse similar to deal we would be very valuable and go along way. i believe is imperative that we do this unless we take seriously and tried to reform the workforce development system, eventually what will happen if the republicans in the house
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will succeed and we won't have job training programs come at least federally funded job training programs going forward and that would be a bad outcome. thank you. >> thanks, ken. we've got time for some questions. i guess i'd like to post the first one to the panelists. one thing that strikes me listening to the presentations today is a great deal we don't know for minera economic perspective about what works and what doesn't. we've heard program evaluation results using various technologies. these issues about how to randomizes the one. but there's also a set of issues and this came up from the very beginning and larry's remarks even a suppose we know for a minute exactly what work and what didn't, how would restructure the existing system in such a way that those who are operating the programs, those are making decisions about resource allocation had the proper incentives or renew how to design the incentives in order to make best use of what
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we've learned. but just want to see if i can hint at this a little bit. he suggested a couple of alternative strategies, but i wouldn't mind hearing from the other panelists and maybe tennis club about that part of the equation. >> go-ahead. >> okay, i actually try to mention this a little bit, but i do think it would be helpful first of all to separate the issue of how much were going to spend on training with which programs were going to fund and not fund. so ken and i are in agreement that making a more centralized sort of clearinghouse program would be a way to do that. and i think making it more -- have a more a sort of a technocrat, but someone by the
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procedure where we do evaluations and sort of constantly change which training programs are working or how we are just in it. something has got to happen. so you said you assuming we know what works. i can't -- something has to happen with the performance standard data because that is so bad that it's really pie-in-the-sky to say assuming that we know what works. so i guess you also have to assume that they've solved that nature problem of what is the right data to collect and that they are collect tenet. and i think once you've done that, then people -- if you solve that problem, a lot of the incentives that various stakeholders like to state agencies and the grantees and all the people running these programs have will become less problematic because they say you can not clearly on our programs. let me just give you a concrete
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example of why this performance standard stuff is causing so many problems. the department of labor has lots of money put in in the know was there for everything we're doing for evaluations, but theroblem is we were collecting always very good data. one of the most highly politicized things that came out of the stimulus was green job spending and everyone was paying a lot of attention to whether this green jobs training was actually working. i took a look at that data and output like the worst in the world. nobody was getting a job. it took me in my office a long time to figure out one of the problems with the grantees were only reporting people as employed if they had a new employer. but as our shot, almost half of the people coming into the program had an employer before they started the program comes to those people were reported as unemployed when they were going back to their employer. so that makes it impossible to judge. we also figured out they were being asked to report quarterly, but it wasn't being -- they weren't being cleared about
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whether the person had actually finished the program. they may have finished one aspect of the program, but still be in training so we could not tell who was finished with the program should be looking for a job and who wasn't. moreover, we couldn't tell in the program -- as we can tell whether they completed the program, we certainly couldn't tell when they completed it. so had actually been a quarter, three months since they completed the training and therefore hadn't found a job, or had it been two days and it just so happened they completed the program right at the end of the quarter when they had to report the data. so as a result you have people who really want to continue funding -- training for great jobs that are doing everything they can to protect it. a menu of people who want to kill it who are trying to use whatever information they can to kill it. i'm just trying to figure out, desisting do anything or not? and i just couldn't with the data we had. >> so i agree with all that,
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particularly in terms of the performance standards and making sure they provide the right incentives. i also want to touch and more generally the issue about communication and credibility regarding how research should translate into policy. and mention again the research and evaluation of clearinghouse because is something we've seen change greatly at the department of education, where the department of education generated a lot of research, but it wasn't known about. half the school districts the state's states and school districts didn't understand how that research could relate to day-to-day experience and i was the major object to the clearinghouse was to provide a venue to communicate to the states and school districts regarding the research. now wasn't only about communication. it was also about credibility. one of the key aspects of the web works clearinghouse was too applied standards to the
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education research did in the described. they might have an area of study where they find 200 studies and decide three of them past their standards and that's good because it's a local school district had to deal with a couple hundred studies and didn't understand the research standards, they would probably throughout their hands and give up the contradictory findings. it's good to have the filter to create credibility that can be identified to see the department of labor is headed in the same direction by piloting a similar concept. a couple of other things to is we have to be a realist take about some of the constraints they face out in the field. i talked about before about the ita experiment and the structure choice alternatives to the traditional approach that was clearly rejected by local operators. and we have to think carefully about what is the psychology of administrators that leads to
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that decision. so being realistic we have to realize for dealing with human nature. administrators want to be helpful to people that come into their office. no banana structure choice direction likely they don't have our fun and it's likely to be no concentrate funding more among smaller participants in they may not want to do that because it means earlier in the year they will have to tell people who walk in the door they don't have any fun and to support them. so we need to be cognizant of that and how we frame the psychology to change the response to it. from incentives would obviously be an easy way to do that if we could come up with great performance incentives through the performance standards. do we know the challenges they are coming so we have to think about other approaches to that. one caveat or one note that i want -- are warning that i want to strike with respect to
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consolidation. i'm all about coordination and consolidation and as we've seen from the numbers, there's a lot of consolidation to be done here in this world. the consolidation isn't necessarily synonymous with either simplicity your success. so we are dealing with a lot of different subpopulations that have different needs and meet different services. and that is likely to exist regardless of how we consolidate. so we spend the money to the state for a block grant, my fear is they will re-create the same thing, though just recruit 50 version. and so, you know, we have to worry about that. an aspect of that is worrying about the conflict between consolidation and customization, where i think we've shown test innovation is pretty important in fashioning services affect you for different populations.
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and you know, if you consolidate, where would it be consolidated? we know who are going to consolidate to solve, local areas take a fairly light touch. yeah, there's a lot of choice, but they constrain it by controlling the dollars available to the participate. so finding and a strange of the world they can to they give you so many dollars. so even though there's theoretically trace is a constraint on choice they are. if you're going to consolidate services for all populations, that might not be a general strategy to apply to the super populations. so even if you consolidate, we have to find a way to customize services in a way that matches effective services to different populations. >> just one thing to emphasize the administrators. it's a real barrier putting people through a lottery and that is something for getting people used to it. but she hear that a lot but it seems than they are they don't like the unfairness of it.
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it's another thing besides their psychology, which is their technology and that's a real barrier for them making changes because they are often dealing with very, very old technology, with ac administrative costs of making changes that are just enormous because they're dealing with some 1880 computer. >> i certainly agree with the comments that paul made about some of the cost of consolidation. i would argue honestly one of the benefits as it allows you oic to be more flexible and to address changes in the labor market that you might want to take advantage of and allows you to restructure the program towards things that seem to work. but of course there's cost and benefits to everything we do and we have to think about this carefully. i would argue right now there are too many stakeholders in the room and consolidation helps focus amongst the few and allows
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more identification of who is responsible for providing the services and a clear fashion so that both mentally they are the ones sent to get it right. i think right now it is designed in a way that the responsibility is diffused over so many different individuals that no one takes ownership and no one has a great deal of responsibility if things are working. >> recommit thank you. it may open it up to the floor for comments. please visit the microphone to arrive of itself. >> fred trays with regional economic models aimed. the question i have is going back to what professor toske was talking about what general equilibrium or economic effects of the programs and commented there wasn't much research. i wanted to know if the others were familiar with any research
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and also if there is an overall macroeconomic affect to the program, exactly how does that work? you know, either companies that are constrained from expanding? is the question of international competition. so what is the rationale be behind getting changes in either total employment or total gdp by >> let me qualify what i'm up a general equilibrium effects. others refer to as the train this worker and they go out and get a job, they simply are with another worker who would not match up anyway and workers unemployed. you take a trademark or and not had any overall impact on the labor market. each suit of redistributed jobs amongst individuals. when i redistributed that's what i had in mind, but i'll let the others kind of address.
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>> so playing off that definition in general equilibrium, i am a waste of two minds on this. when mind that understands a lot jack of worker displacement that could occur by being crowded out by people who are jumped further up in the? so as a researcher anders stand to journal articles, but then i think about it as a ceo and when i read a journal article is usually a fixed number of vacancies. i say, do i always fixed number of vacancies at my company? no, i don't. it's just like kerry described earlier about this margin, where you can imagine creating jobs depending what is in front of you. so the number of vacancies we have that her organization is pretty fluid and we would be responsive and different ways to different context.
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so it is important to think about in particular how devotees to the interventions contemplated. if you have an intervention that is advancing skills, this crowd out or displacement effect is less likely to occur. if you have some name that is just a simple bonus, whoever gets the job first gets an extra check, then you have to be a little more skeptical and then carter about the displacement effects. without further evidence being done overseas, i tend to air in the direction of thinking there's a lot of flexibility in the mortgage industry. >> i'll give an answer that's similar, but a little bit nerdier, which is just a think about if we have more productive workers, denver going to produce more, so that's good for the
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economy and that will boost overall gdp. but then the question is why don't these workers get this train on their own? was the role for government to participate at all? you have to ask him is there some barrier that will prevent these people from going through training programs from developing skills on their own and barriers may be credit constrained. it may be that they're making mistakes so that they are naÏve and not investing enough. so some aspect giving light to the worst workers to try to better the life and some of that is that we think they would underinvest in their skills because the things that credit constrained or myopia. >> and i just want to make clear i agree exactly with what paul mbeki said.
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it goes to all possible explanations. i would like to know what's going on and we don't have a lot of evidence. i believe what paul said is true, but aunt don't have a lot of evidence. i would like evidence so i can make better decisions. >> yes. yes, sir. >> my name is nick better -- nick utter feel the network for senator port from ohio, neighboring states choose tennis and that's as good at what to ask the consolidation of peace. the 2009 gao report is cited frequently overlap with the current system. my question for you, is there room for bipartisan consensus unassertive creating for consolidation or whatever you think it may be? the more aggressive consolidation of block granting.
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is there consensus on that not for steps moving forward for consolidation? >> you can answer that question better than i can because i don't spend a lot of time on the hill. my own interactions i will send my and our actions have -- has been in the past trying to convince some republican staffers on the committee said appropriate money for job training not to use our study as a reason to simply kill all job training programs. ..
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how to better run and orgaze these programs. i do think that, i mean i do think again, given the problems that we see in long-term unemployment, we have got two choices. we can provide skills to these workers who have been out of the labor market for a long time or we can continue to support them on other types of government support programs, or we can just cut them off and let them drift off on their own but i don't think we would do that as a country. i would think that given the large supply of workers that we see that are going to need something, it seems like a way to think about going.
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>> so i don't think that block grants is consolidation and that's because i worry about what paul said, now we are the consolidating with 50 states are running independent things. i worry about in that united states mobility is declining and we need to encourage mobility, not discourage it so i would rather have people be able to get the information they need and have it help them find employment in the united states, not in the state only of ohio. so i think that those are separate questions about can we come together and think about a way to consolidate the many federal training programs and does that consolidation involves block grants? i think those are two very different policy issues and you know, i think on the first one you are going to be able to get a lot of bipartisan consensus. i think the second one will be harder.
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>> i would say that i think the consensus can go beyond consolidation so i was interested in this question too and preparing this session and collected senator coburn's office reports from 2011 in the queue recommendations for consolidation, improved performance metrics, conduct more rigorous testing and target the needs. those all seem like recommendations for consensus on how to move ahead. >> we will take two more. we will take your comment and then we will go to marry cat -- larry katz if we get a microphone. >> i have a question about, this is to build on dr. stephenson's distinction between blog ranting and consolidation. focusing on blog ranting, however you want to look at it,
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consolidation and that is pushed down a level. in terms of control. can you point to any examples where following that, following block granting and whatever program area where there is better data better quality data coming up, more consistent and more high-quality evaluation. my sense is the evidence points the other direction and there is actually less focused and less commitment and less even interest and less ability to identify outcome data and certainly i would be interested to know if there are examples where there is actually some higher-quality research data enterprise emerging after block granting? >> while it's not quite the
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experiment you post, but you can think about the system of education and the data that was available there in a decentralized system. before and after the federal government stepped in and funded the creation of the data systems to the tune of many hundreds of millions of dollars. the data were in pretty rough shape prior to that investment and are improving now. so, that is kind of a reverse experiment. >> yeah, i don't really know about various examples. i think the only thing i would say is that i mean, a nice place and maybe you might even think in the middle as giving states the freedom to run their own experiments but having those experiments somewhat overseen by the federal government that collects the data and comparing experiments run by different states. once you leave it all up to the states then i think it's hard to get that communication which
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makes it hard for us to actually pull all those evaluations to gather. >> i certainly would agree with betsey. i suggested law grants that the federal government role in that would be to ensure that states continue to do a reverse evaluation and would continue to provide guidance on the appropriate way those evaluations, and required as part of receiving the money. that is just one alternative. >> larry katz gets the final question. >> thank you very much. this has been a very helpful panel and i have a question about some of the issues and doing evaluations and the data, which is there has been a lot of discussion of the difficulties of getting stuff to the states, ui records and you know all the performance issues but i ain't
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understand and i can be corrected, is that there are a lot of barriers within the federal government and in fact a lot of this could be done -- for example the state ui records have to go to hhs as part of the system, looking over dads paying child support and they move across state lines but the legislation is set up gathering ui data at hhs and how that is interpreted. social security data can be used for evaluating all sorts of programs without having to deal with all the issues. the irs data so it seems to me we really need the states to have better templates for the performance data and this program but it may be the outcomes whether you are on -- you know what your earnings could actually be much more done at the federal level and
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research are getting access there so i would just like to hear some response on what we need done by the states and the federal government to allow them to be evaluated. >> i guess i will comment. there certainly are alternative data searches that one could imagine. i guess getting back to jeff's comments, there is not an evaluation culture. having spent a number of years working for the consensus beer all i can assure you of that. and so it does take a changing mindset that we are collecting the state and we should be using it to help guide policy. i do think there are some alternatives. is difficult oftentimes and in some sense the state told me we can't give you these data because of rule changes that occurred in the department of labor and i look at the rule changes and the rule changes explicitly said well if you have someone is interesting -- make
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interested in this they can given the date and i go back to the state and then apparently there are state laws that have been change that changed that says no they can't -- there doesn't seem to be an emphasis and a focus on is it an important thing to do and any more than anything else, that is really what needs to change and if we change it then maybe we'd start seeing alternative data sources such as social security data being available to use for the evaluation purposes. >> so there are lots of problems with data-sharing within the federal government and i think that might be actually one of the issues. four years, the very statistical agencies have been trying to push legislation forward that would improve data-sharing among them and so, if you talk about we need to do better data-sharing with researchers, we also need to be sharing
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across the federal government and that is going to be a first step i think to sharing with people outside of the government. i can tell you that the permanent labor collects in terms of the ui in the state is very minimal and i was very disappointed to learn, i couldn't figure out things like how low someone's unemployment fell by the information that was collected by the ui office. and when did they exit and where were they or how many weeks that they have been receiving ui when they stop getting ui? you know who gets the final check that anybody who is not exhausting those don't know much about it. so i think, the excuse was always the couldn't handle the kinds of data request you want from this day.
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i don't know how much hhs is getting but i certainly never heard of sharing between hhs and dom on unemployment data. it's in different stages in different agencies. it's not being driven by a culture of evaluation. is being driven by a focus on analytics but to some extent the private sector is still very much in the development mode. notwithstanding jeff smith shop which apparently was there. that is a whole resolution in terms of how you get data more effectively and have it more effective in driving business decisions and that is what a lot of people are facing the federal agencies. they need to make asic decisions based on relatively simple data but because they can't bid get
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their there have been a lot of discussion about how the link cms and social security data in order to be able to address some of these issues so i think that's going to look very different in a few years. >> okay so i've that wraps up this program. i would like to thank the speakers for an excellent set of presentations and i think all of you for coming and i would also like to thank the aie staffers to make sure the event ran smoothly. you might want to stand up, for on account, britney and emma bennett. thanks very much. thanks to everybody. [applause]
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the flag at the u.s. capital was lowered to half-staff in honor of the victims. the latest news in the latest developments by the "associated press" reporting the navy has launched to shift to the libyan coast.
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>> inspector general and the general services administration says steps taken by the new leader of that agency could present a scandal with the 2010 las vegas conference. this homeland security, send homeland security governmental affairs committee hearing happened today and it's an hour and a half. >> the hearing will come to order. good morning and welcome. this morning our focus is on what the general services administration is doing to move
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beyond the scandals that have recently dominated its activities and the public's impression of it and get back to saving the taxpayers money, which is its function and of course through the efficient acquisition of goods and services and smart management of government property. the agency's mission has been sadly compromised by the scandals involving involving a minority of employees at the agency but unfortunately that is the reality. former administrator arthur johnson stepped down in april after the inspector general reported generally outrageous and offensive spending on the gsa western regions conference that cost over $800,000. her replacement acting administrator daniel tangherlini
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is with us today to discuss what he has done since then and where the agency goes from here. i want to say that i have been impressed by your efforts mr. tangherlini to curb irresponsible spending and to conduct a top to bottom review of gsa policies and operations to determine if there are other areas where the agency has been a careless stewards of taxpayer dollars. the committee's interest in this subject is based on our jurisdiction over government operations generally. sometimes people focus on the homeland security part of our jurisdiction but the traditional long-standing jurisdiction is governmental affairs and we have specific jurisdiction over the gsa. to most americans, the general services administration is probably unknown or is an obscure federal agency but its purpose could not be more
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important to the way our government spends their taxpayer dollars. i think gsa's history is relevant and interesting and i just want to touch on a briefly. in 1947 congress established the commission on organization of the executive branch of government to recommend ways to streamline the government while spending quote the lowest amount consistent with the performance of essential services end quote. the commission recommended creation of a separate agency to purchase goods and services and maintain public property across the government as a way to eliminate duplication, streamline operations, limit government spending and help other agencies be more efficient. in other words, the agencies are all doing this themselves. in its final report the commission said and i quote
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again, to the general public a housekeeping at give these are little known but unless they are properly administered, the executive branch cannot cannot be effectively managed end of quote. the words of the commission rings true today as they did in 1947 and in some ways even more loudly because of the period of economic stress and we are in and because of the unprecedented enormous debt that they could government is running so we have got to do more with less. gsa is one of the lead agencies that can help us do that and it actually has an enormous portfolio of responsibilities. gsa negotiates contracts worth more than $40 billion a year, manages $500 billion in assets, mostly real estate, and owns or leases 9600 buildings around the
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country. that is a big operation. the agency is critical to the maintenance for instance of our courthouses, ports of entry and social security offices. it make sure that federal workers have what they need to perform their jobs from office supplies to i.t. services. it takes care of what the 1947 commission called housekeeping matters so that the agencies and the federal government can focus more exclusively on their mission and it leverages the purchasing power of the entire federal government to get the best deal possible for the taxpayer. we know that most gsa employers go to work every day with one overriding goal and that is to serve their country, not themselves. but obviously we also now know that some gsa employees are falling very very far below
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that. aids trips by gsa employees plan for las vegas conference and an awards ceremony that cost the taxpayers $822,000. conference organizers spent over $146,000 on -- $75,000 for a teambuilding exercise that involved building bicycles, thousands of dollars more on after-hours parties and over $6000 on commemorative coins. we have heard that litany of the responsibility before but it bears repetition as we consider what has happened since those disclosures and what will happen going forward. unfortunately the las vegas conference was not an isolated incident of bad judgment. we now know from the work with the ig and other work that has been going on and evidence that our own committee has collected
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that there was what i would call a culture of abuse and irresponsibility in gsa's region nine with all of that extravagant travel, misuse of government purchase cards and a very poorly won awards program that allowed employees to treat themselves to ipods and dvd players. we found questionable to say the least, bonuses awarded throughout the agency, thousands of dollars spent on cooking classes for employees in the kansas city region and 270,000-dollar awards ceremony where taxpayers paid for gsa employees to beat on drums. into many parts gsa has become an agency out of control. acting administrator tangherlini has shown he understands this and agrees and is working on new
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procedures directly for the approval of -- and has canceled 47 conferences determined to be questionable. these changes have saved the taxpayers over $11 million. he has also strengthened the chief financial officer's authority over gsa's regional offices, which i strongly endorse and has cut 85% of senior executive bonuses. today mr. tangherlini will report on his review of gsa to get the agency back on track to fulfill its core mission as i've described it. gsa inspector general is here with us today. he is a real hero in this story and has worked uncovering the flagrant and inexcusable spending by some gsa employees. today he will help us understand how these scandals fit into the agencies overarching management
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problems. i was struck by the enormous award to the whistleblower of over $100 million for uncovering the tax fraud that was going on and i don't think we can award you that some of money this morning mr. miller. but you have our invaluable, i hope, i'm really quite sincere -- gratitude for your work that uncovered this mess. the bottom line, we have got to go together and go forward, gsa, congress and the administration to ensure that spending abuses like those uncovered at the agency are never repeated and to help gsa return to the fundamentals of helping our government do more with less. of course i would hope that our hearing today helps to keep that process in motion. senator collins. >> thank you mr. chairman.
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first of all i want to thank you for holding this important oversight hearing on the gsa, the agency that is the nation's landlord for federal agencies and is supposed to be the federal government's leader and procurement and administrative services. let me begin my remarks today by sharing with you the following excerpt from a "fortune" magazine article that describes some of the problems at gsa. quote, the new administrator claims that there have been improvements in gsa. gsa is nevertheless, the most durable in washington. the story involves u.s. corporations and marginal operators. chicago politicians will watch
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influence peddlers and fixers and above all, timeserving bureaucrats who are just jobholders glowing with contempt for the u.s. taxpayer. happily, the cast also includes some honest, capable gsa employees, hairy, half underground and hoping for better days" map. by too am and hoping for better days, but my hope is tempered by the fact that these words were written in 1955. and yet, here we are again. in april of this year, we learned about the inexcusable way that taxpayer money at the 2010 western region conference where gsa employees, as the chairman has indicated, spent
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more than $800,000 for a las vegas conference and aids offsite off-site planning meetings in advance of the real meeting. the inspector general found that gsa violated numerous contracting regulations and policies including the federal travel regulations in connection with this conference. the ig also says that this situation raises special concerns because gsa, as the federal government's management of acquisition policy, should be a model and contracting and managing travel and conference costs. it has underscored that the agency's financial control and top-down accountability allowed the 2010 las vegas conference expenditures to occur unchecked. but that is not all.
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since then, our committee's investigation has uncovered 82 one the 12th leadership conference in napa valley costing $40,000 before accounting for travel costs. $300,000 in relocation compensation for an employee who left the agency after just one year. five to six day trips to hawaii for a one-hour ribbon cutting ceremony and questionable monetary awards and bonuses for some of the very same people involved in planning the las vegas conference. now, gsa employees knew that this was wrong. one admitted to the ig, quote, i never tell my friends what i
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spend because they are all out of work and they would say to me, are you kidding me? undoubtedly i would say to our witnesses and our committee members, that is the reaction of all taxpayers footing the bill. all of this tells me that there isn't just an inexcusable lack of financial controls and accountability at gsa. there is also a culture problem that says that this is okay, that this is acceptable, just don't talk about it. after the las vegas conference scandal broke, some try to claim that the problem was isolated to the western regions or even own the region nine based in san francisco but additional facts suggest others. we have read press reports about gsa spending $20,000 for cooking
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classes for employees and kansas city for teambuilding exercises. gsa also through a one-day awards celebration in november of 2010 at a cost of nearly $269,000. this is the event that the chairman mentioned at which gsa employees received drumsticks so that they could all drum together. the cost of this drumming exercise for each employee having their own ease -- gsa purchased drumsticks, almost $30,000. in light of these continuing revelations this committee has sought explanations from the ig, the acting administrator and all 11 regional administrators. their responses highlight the importance of the top to bottom review that i want to commend the new administrator for
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undertaking as well as the urgent need to implement organizational change and improve accountability. the regional administrators were not able to answer even basic questions about the budget and spending in their own region. they reported that the public buildings service and the federal acquisition service operate with separate budgets and with separate reporting structures, but here is what is most troubling. the fact is that no one in the agency has been able to provide detailed information on conference spending and related contracts within the region because there has been no system to track such basic expenditures. consequently the top leadership of each region had little to no authority over the regional activities and spending of pbs
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and fas. the convoluted configuration makes no sense and does not promote accountability. gsa also appears to have an extremely generous award policy that appears to have little correlation with excellent performance by recipients and let me make clear that i recognize there are some top-notch employees at gsa. i have had some of them detailed to my committee staff and some of them have extraordinary competence and dedication, but we have learned that 50 people involved in planning the las vegas conference received awards totaling $35,500 what was the outstanding performance for which these employees were being rewarded? foremost it was solely their role in planning this calm
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friends. and employee who left the las vegas conference planning received an award of $16,500 this award was given after gsa leadership was informed of the igs initial findings related to the conference scandal. other executives involved in the conference received similarly generous rewards ranging from $15,800 to to a headshaking total of $54,640. this was not just related to officials who planned the western regional conference. one federal acquisition service executive received an award totaling $79,000. this is outrageous and particularly so in the midst of what is supposed to be a freeze
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on paying the federal government, a bad economy and high unemployment. i very much appreciate that the acting administrator has recognized this problem as well during the course of his review and found that there are clear deficiencies in the area of performance awards and has frozen awards pending further review. the top to bottom review must resolve and lasting, sustainable reforms. not one more dollar can afford to be wasted. the time for patiently hoping for better days is over. i am encouraged by the acting administrator's actions so far but aggressive congressional oversight must continue because to quote from the 1955 article, gsa seems to be the most durable
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in washington. thank you. >> thank you senator collins. repost separately went back to the case in the founding of gsa and seven or eight years later it had already become a durable mess so eternal vigilance is efficiency in this case. before introduced her to witnesses i want to thank both of them for their answers to the oversight letters that senator collins i sent following the western region conference scandal. acting administrator tangherlini and every gsa regional administrator was asked a series of detailed questions about the financial management of gsa, the organizational structure of the agency conference and travel expenses and a range of contracting issues. we also offered our thoughts to the ig on ways to discontinue
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oversight might be helpful to our committee and he responded quite positively. i want to note that these letters, as well as the responses, are all posted on our committee's web site for public view and we will also include them in the record of this hearing and i think it's an indication that this committee which will be under the leadership at least in part next year intends to continue the oversight of gsa. with that, i will call in the acting administrator of gsa, dan tangherlini. >> good morning chairman lieberman, ranking member collins, members and staff of the committee thank you very much for having me here today. i want to start by thanking the members of this committee. you are responsible and thorough oversight brought many of the issues that we have investigated
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in recent months to our attention. i would also like to thank our inspector general brian miller and his staff to join me here today. for my first day in this position i made it a priority to build a constructive relationship with him and his entire team. along the way is contribute many contributed many important recommendations for reform. five months ago i was appointed by president obama is that any administrator of the general services administration in the wake of an investigation into the 2010 gsa western regions conference. what happened at that conference was complete waste of the taxpayers money and an unacceptable breach in their trust. this event was the result of a pattern of misjudgments in gsa that took place over several years in multiple administrations. this pattern has no place in any federalized agency but it is particularly at odds with the priorities of this administration and the mission of gsa. since we were founded in the
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wake of world war ii our mission has been to deliver value for the taxpayers as well as consistent and responsive services to the agencies of the federal government. in this time of shrinking budgets are mission has never been more important and it's critical that we find a way to make every last taxpayer dollar count. refocusing gsa on this core mission has been the driving force behind every action we have taken since i have arrived. as acting administrator i immediately move to build systems to prevent this kind of waste and abuse. instituted a series of reforms that centralize the review of proposed conferences and cut back on employee travel. this resulted in the elimination of nearly 50 conferences and reduce travel budgets. these actions the party save more than $11 million in taxpayer funds. we have also created a mandatory on line training of conference attendants to ensure that every employee of gsa understands their expectations of what is
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acceptable at conferences. my next step was to put together a team of experts from both outside and inside gsa that spent the next five months doing a top to bottom review of this agency. our task was to examine how gsa operated and what reforms could be implemented to help the agency better accomplish its mission. the top to bottom review has been conducted along several simultaneous tracks. the conducted interviews and meetings with each of the employees, both one-on-one and the leadership of two dozen major operating units within gsa to discuss strategy, operations and human capital. through the great ideas gsa employees across the country sent in their ideas for saving money and other reforms generating more than 600 ideas and thousands of comments. so far the ideas implemented from this effort have already generated nearly $6 million of potential savings. we also looked beyond the federal government and met with
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business leaders and procurement and real estate to find best practices from private-sector business models. at the same time reformed exhaustive analysis of financial and performance data within the agency as well as studied inspector general and gao reports. finally we held more than a dozen meetings with other federal agencies for feedback to identify areas where gsa can provide greater savings. through this review of gsa has instituted reforms addressing the problems that exist within the agency while also enabling us to better serve the american people and other agencies in the future. to start with, i issued an order to consolidate all budgets, finance and accounting personnel under the chief financial officer by placing the responsibility for all spending and budgeting decisions in this position. we will be able to increase transparency, accountability and oversight on gsa spending giving congress and taxpayers a better understanding of how we -- and where their funds are being
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used. one11 of the key findings of our job review was that the konczal common celebration of the cio function provides an opportunity to improve the performance and cost-effectiveness of gsa's i.d. portfolio. previously the chief information officer had limited authority of a project development, budgets and performance. this week i will be notifying congress of my intent to consolidate health information technology personnel, budgets and systems under the cio. by creating a central authority over the development and maintenance of information systems gsa will streamline his ig investment while also increasing access to agency data. gsa will also be notifying congress of her intent to consolidate hiring responsibilities and human capital management personnel and operations under the people officer to eliminate redundant areas of activities and functions. another area within gsa where we found the need for reform was performance awards.
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it is imperative we never forget that the quality of the work we do must not be dependent on rewards and bonuses. the quality of our work should be based on our pride in our mission in serving our federal -- fellow citizens to the best of our ability. going forward this will be the barbie set ourselves. to this and we have are to cut bonuses substantially with executive performance rewards being reduced by 85% this year and the suspension of all performance awards in the administrator's office. we will go further by reducing the budgets for all performance awards across the agencies. i believe these award should be issued for notable service that goes above and beyond the basic expected level of performance. in the future of gsa will refocus our programs -- awards program by integrating cost savings and efficiency goals. the core elements of our mission and every employs responsibilities. it will be by those standards
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which define our agency better employees will be judged and rewarded. moving forward i've instituted a targeted hiring freeze across the agency as we examine how gsa structured and won the most efficient and effective compensation process for our employers. we must ensure any new hires are aligned with the outcome of our ongoing review. lastly, we filled an important leadership position of gsa by naming.your dorothy robaina is the agency's commissioner to the public buildings service and we are working on finding a federal opposition service commission as well. these leaders will help her turn gsa to its core mission and saving taxpayer dollars and reinvigorating gsa's two main business lines. finally as part of our mission to deliver value as well as president obama's campaign to cut waste we also examine multiple ways gsa can better save taxpayer money. for example he found many of the fees assessed on other agencies for usa schedules that have not
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been reviewed or adjusted in many years. based on our review we will be proposing the reduction of targeted fees from our federal acquisition service. this saves millions of dollars. wewe are also convening an inter-agency working group to review and develop recommendations on the overall fee structure of the schedules and will be reporting back to congress on those findings. over the past five months we have already made significant progress for building a better gsa. the agency is filled with talented individuals who do outstanding work on behalf of the people of this country every day. this review has helped us begin to transform gsa and an organization that can utilize his talents to their fullest potential. i'm confident with the sport of congress we can accomplish these reforms and create a culture of continuous evaluation and improvement at gsa. that is the kind of culture we need to restore, the trust and the american people and refocus the agency on providing the
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highest level of value to serve his country and i welcome the opportunity to be here today and answer any questions that you may have. thank you. >> thank you very much at administrative tangherlini and mr. miller thank you for your good work and we welcome your testimony now. >> chairman lieberman ranking member collins members of the committee thank you for the opportunity to testify in today's hearing. we have several ongoing investigations involving conferences and we have an ongoing audit of conferences held between a sober 2011 and april 2012. we expect that the issues we have identified thus far will be ran the deed with the changes acting administrator tangherlini has begun to add -- implement. it we look forward to advising the committee when we complete those reviews. audits of contracting practices
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also continue and we have issued three reports recently that are available on our web site. those reports found that among other things that the federal acquisition services, network services division lacks written procedures and management controls over contract administration and contract while documentation for blanket purchase agreements for fas. blanket purchase agreements did not support awarded provisions are provide a complete history of the opposition. management concurred with the findings and recommendations in those reports. with regard to purchase cards, our office of investigations continue to conduct reviews and investigations of suspicious transactions across the charge card program. these ongoing reviews have recovered over $1.9 million over the last couple of years through
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forfeitures, restitution, fines, seizures, recoveries and penalties since 2009. we report on significant management challenges at gsa each year. are audits and investigations are structured around these challenges and focus on high dollar contracts and federal buildings. we will continue to update congress and worked with the agency on any serious challenges we uncover within its programs and operations. finally, would like to briefly address the steps being taken to reduce fraud, waste and abuse at gsa. i am encouraged by the steps acting administrator tangherlini has taken to make sure that something like the 2010 western regions conference could never occur again at gsa. the first step in stopping waste is to identify it and to accomplish that employees need to be willing to come forward when they learn of questionable
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activities. the acting administrator and i conduct a town hall meetings throughout the regions to reiterate the valuable role gsa employees have as the first-line of defense against fraud, waste and abuse. in the month following the reports release the number of incoming hotline tips more than doubled and i believe we are seeing improvement in employee's willingness to raise concerns. i would also note the gsa has responded to each recommendation made in the western regions conference report and among other things gsa has moved to centralize the office of chief financial officer and other officers. it is also my understanding that the office of administrative services is implementing controls over conferences including spending and procurement, to ensure top-down accountability and 47 conferences have been canceled. additionally, gsa has introduced
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a new on line training session on conference attendance is mandatory for every employee. thank you again for the opportunity to testify. i would be happy to answer the questions the committee may have. >> thanks very much mr. miller and we will begin with a seven minute round of questions from the members. mr. miller as you know on may 10 senator collins and i sent a letter asking that you conduct initial investigations of the conference and travel expenses of gsa, so we could have a fuller understanding of the scope of the problems at gsa. since that time i know that the acting administrator has also referred other questionable activities to you to investigate including the 270,000-dollar award ceremony held by the federal acquisition service that we have referred to. i know these are ongoing, but i
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wonder whether it's possible for you to give us a kind of update on whether you have seen evidence, further evidence of the scope of the managerial problems, in other words beyond the western regions? >> senator, as you know with ongoing reviews it's difficult to reveal about. i will tell you the parameters of the audit, we are looking at conferences that occurred in fiscal years 2011 and 2012 that had over 2500 employees attending and that were over $10,000 so we are looking at those conferences. we are identifying the hydra's conferences, that is conferences where the price per attendee is over the average price for attendees so we are identifying them in terms of high-risk.
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in terms of the scope, we are looking at similar problems that occurred at wrc and there are many problems that occur in some role -- similar in the wrc report. there were many problems that were identified and there were problems with the event planners and we are looking to see if that is unusual or not. if there were problems following contracting procedures, we are looking to see if those problems are unusual or not and expenditures, unusual expenditures, and we will continue to look at that. we are focusing on those sorts of issues. as far as we can tell we have a great, we have an example in the western regions conference of the problems and acting administrator tangherlini has put in place controls to address those problems.
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we are looking at the recent conferences to see if there are any other problems outside of those and certainly if we find some we will report them as soon as possible, but acting administrator tangherlini has put into place controls that prevent problems like wrc from happening again. i'm not sure how many examples the committee needs to support the fact that these controls are needed. >> okay, so at this point you are not prepared to say more than that because the investigation and the response to our letter is ongoing. >> it is ongoing mr. chairman. i would love to tell you more. i don't want to in any way inhibit the accuracy and i would rather be fully accurate. >> good enough. no, i appreciate it.
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so, mr. tangherlini i welcome your testimony that you are going to look at the fees for the use of its multiple award schedules program. the fee, for the benefit of others, which is expressed as the percentage of the dollar value of orders placed under the contracts, has remained stable, that is the same, at 0.75% since fiscal year 2004. in recent years, the fees have generated well over $250 million a year. both gao and the ig of questioned have questioned whether the that be could be lowered to save the agency's money and of course we welcome that but the reason is an important one which is the fees have now generated more than is needed to actually run the schedules program.
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ig miller's audit of the fee program earlier this year found that as of september 2009 the revolving fund or the fees deposited had reserves of over $687 million come, a considerable amount of money. mr. miller is there an update from september 2009 about how much it was enough fund at this time? >> i don't have an update right now on the amount of the fund but you are correct about our audit findings. >> to the extent that you have a more recent number, i would welcome you to submit it to the committee for our records so let me come back to you mr. tangherlini. as the ig pointed out in his audit interestingly the funded cost of a programmer to help fund other programs run by the federal acquisition service or excess ones can actually be returned to the treasury, but it seems that the decision-making
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process for what happens to these reserve funds is effectively a black box at this point so i want to ask you two questions. one is whether you have thought about what you will do with the excess or what you would recommend be done with the excess funds and secondly are you prepared to do something that will make the process of handling these funds which after all his public money, more transparent? >> thank you very much mr. chairman and to answer your second question because that is the easier one, the answer is yes. we need to particularly when they involve the agency and by extension taxpayer money so they know they are getting the best value for their resources that they put in. i do want you to know that the ig report in the gao report were foundational for us taking a look at the way the charge these
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fees and the way we build these reserve balances. what those balances are for is a strong an important reason why congress gave the authority to fas to reserve these phones so they can make sure they continued to need to provide services. but that having been said but don't think that they have been substantially revisited and quite some time and it's worthy of good inspection and a better understanding of what should be the right level for a reserve, how can we provide a more transparent process so we can see what's going on within fas and at the same time we think there is already an opportunity for us to reduce the fees. we have a surcharge on the strategic sourcing initiatives contracts right now than in many ways discourage agencies from doing the right thing. and we want to take away that
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the. we want to reduce some other fees and we really want to kick off a broader discussion with their agency partners and say what's the right structure for this fee and fees going forward, recognizing the analysis done by the ig and the gao. >> i welcome that response. so i agree with you that there was a reason for establishing the reserve fund, so we don't want to eliminate the reserve fund but on the other hand, this is clearly a time in our federal government where every dollar counts and millions of dollars i would guess in excess in this reserve fund so i urge you to go forward to figure out both how to reduce the fees to the agencies so interned that will reduce pressure to raise those dollars by taxes but also to figure out how best presumably with omb, how best to use the
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excess funds to help us in a small way to get back in balance. my time is up. senator collins. >> thank you mr. chairman. administrator, i want to talk to you about the compensation for gsa employees and in particular about the employee award bonuses. the data that we have looked at surprise to me. it told us that more than 40% of gsa employees received compensation in excess of $100,000, that 14 gsa employees receive compensation exceeding $200,000, with a high of $279,352. now, in some cases, this may be warranted. for example, a gsa procurement
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officer who was deployed to a war zone in iraq or afghanistan clearly gets additional funds, additional compensation and should so. there did seem to be a pattern of extraordinary uncontrolled overtime of employees working in one city but responsible for activities in another city and incurring incredible travel costs and per diem costs, and all of that is cause for concern to me and i want to explore more review. today i want to talk to you specifically about some of the employee awards. now, it's my understanding that for fiscal year 2011, 159 gsa employees received multiple
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awards that totaled $10,000 or more. now, here is what is interesting about this. opm has the process that says that each agency may author rice a payment of the cash award up to $10,000. it then says, awards over $10,000 are quite rare, and that if an employee's performance is significant enough to warrant a cash award of over $10,000, the agency must submit a request to opm. we went to opm and we asked, did opm received any requests from gsa to approve for any of these 159 employees, the award that totaled $10,000 or more?
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and the answer was that opm did not. when we further examined this, it looked like gsa circumvented the rule by giving multiple awards smaller than $10,000 rather than one-time awards that were $10,000 or more. so my first question is, do you believe that giving multiple awards that eventually totaled $10,000 for the fiscal year circumvents the opm approval process? >> i certainly don't believe it's in the spirit of what was intended by the opm approval process and i would want to point out there's one exception that is a significant one. ses performance award in excess of $10,000 to not require opm approval so putting aside that